Stocks plunge after Russia invades Ukraine

The stock market spiraled down after Russia invaded Ukraine, sending jitters to investors even as war loomed for weeks.

Philstocks Financial analyst Japhet Tantiangco said the local bourse plunged as it joined its regional peers in negative territory amid the war between Russia and Ukraine.

“The local market tanked after Russian President Valdimir Putin announced that he is launching a military attack on Eastern Ukraine,” AB Capital Securities said in a commentary.

First Metro Investment Corp. head of research Cristina Ulang said the conflict between Russia and Ukraine would raise the cost of doing business in the Philippines.

“It will raise the cost of doing business — higher fuel prices, power rates and cost of borrowing which may squeeze margins of non-branded consumer stocks,” she said.

Highly leveraged companies will be at a disadvantage, especially those heavy with unhedged dollar loans, Ulang said.

She said the conflict may benefit banks through wider lending spreads and local miners through higher commodity, export prices particularly nickel, copper and gold.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the immediate impact of the conflict has been the increase in global oil and energy prices since Russia is a major producer.

Higher oil prices would lead to higher inflation, which in turn would slow down the economic recovery, amid the reduction in the purchasing power and consumers’ disposable income, he said.

After Putin launched Russian military action in Ukraine, US and Brent crude oil went beyond $100 per barrel.

Although Asian economies face lower risks than Europe does, those that need imported oil like the Philippines might be hit by higher prices if supplies from Russia, the third-largest producer, are disrupted, forecasters said.

Investors already were uneasy about the possible impact of the Federal Reserve’s plans to try to cool inflation by withdrawing ultra-low interest rates and other stimulus that boosted share prices.